Bug bounty programs are increasingly recognized as a cost-effective solution for improving cybersecurity. The study highlights that security researchers (hackers) are not primarily driven by monetary rewards, as their price elasticity of supply is low (0.1-0.2). This means companies can benefit from bug bounties without needing to offer large financial incentives, making the programs especially valuable for smaller firms with limited resources. The research also finds that a company’s size or brand profile does not significantly impact the number of vulnerability reports it receives, suggesting that bug bounties level the playing field for organizations of all sizes. However, the study also identifies that finance, retail, and healthcare sectors receive fewer reports compared to other industries, though this difference is not statistically significant.

In terms of program dynamics, the study reveals that new bug bounty programs do not diminish the number of reports received by existing programs, indicating that the growth of the bug bounty market does not negatively impact its effectiveness. On the other hand, as bug bounty programs age, the number of valid reports tends to decrease, likely due to the easy-to-find bugs being addressed early on. This “age effect” can be mitigated if programs expand their scope, allowing hackers to explore more code. Overall, the findings demonstrate that bug bounty programs are a flexible and efficient way for companies to engage the broader ethical hacking community, improving their cybersecurity posture without incurring the high costs of traditional security audits.